My husband is considering starting his own company. In order to attact the caliber of employees he wants, what motivates you at work that he should consider utilizing?

Ambition

That is probably one of if not my favorite quality in an employee or a coworker. Finding people who are motivated instrinsicly by accomplishment and have a constant desire to learn, collaborate, and contribute - that is the key to building successful team and/or business. When he is looking at potential hires consider those who talk about making an impact rather than money, building and creating rather than bonus and compensation. Those are the people that when hired, will really help transform and grow whatever business your husband is looking to start.

That is just the first piece though. In one of the first companies I worked for, they believed very strongly in rewarding people for performance. Your pay was directly tied to your performance. And yes, every company says that and has those types of raise policies in place, but this company did it in a way that was more effective than anything I have ever seen to date.

Those who performed and made an impact, delivered over and above what was expected, they saw that flow through into their paychecks. Whether it was a metered bonus plan or frequent salary reviews with potential increases - there was no pre-determined set in stone fashion in which an employee could get compensated directly for their efforts.

While that sounds all nice and great, what really made the pay for performance piece SO effective was that the opposite was absolutely true. Poor performers did not stay around for long. They did not linger or stay employed with the company if they did not perform to the expectations. While it may sound harsh, the beauty of that approach is you are left with a group of individuals who are extremely dedicated to making the company a success and they know that they will and are surrounded by people who will work just as hard as they will.

Hopefully there is some actual answers to your question somewhere in there. Bottomline, hire for ambition and measure by performance.

 Not sure if I agree or disagree with Julia, but the general answer is money. Pure and simple.

Performance bonuses are a corporate platitude. Or, the way Julia described them, kinda subjective.....

Anyone worth a good corporate bonus should be able to make a lot more as an independent business person, if they are willing to take the risk.

I guess the exception is CEO level executives, IMHO. I think CEOs are motivated by power as much as money, so they are a different species.

I don't necessarily think that bonuses are meaningless. My point is that corporations often misuse them or do not execute the delivery of bonuses effectively. That in turn does make them a little less meaningful. In a corporate setting, bonuses really are not so effective because at the end of the day what an employee ends up receiving has gotten filtered through so many processes and had so many rules applied to it, the intent is basically lost. (Again, talking about the normal middle management and below employees.)

However, I think if we are talking about a smaller business where perhaps things are a bit more flexible, bonuses are a powerful motivation tool, particularly those that are a direct reward for hard work. It doesn't have to be subjective as you say, rather the consideration as to what the is the appropriate bonus structure for each department and/or business function.

I don't deny people are motivated by money, but that isn't the only thing that motivates people. And IMHO, if someone leaves a job only for higher pay - perhaps that isn't the type of employee you want. I am not saying that money isn't a factor, it is a very important consideration and should not be taken lightly, but if that is the ONLY thing that motivates you, then I wouldn't want to hire you.

I guess my point is, outside of money, there are key things that as an employer you should look into offering or creating as part of your company culture. I have been offered several positions at various companies, some with higher pay, but its the total package that a company offers that is important to me. (The people, the environment, room for advancement, and culture)

I think in my experience, if you are successful at building a good company that enriches people and helps them grow - then you can attract quality people even if your budget doesn't support top dollar salaries. You would be surprised how many people would take a lower salary for a better work experience.

I feel that with small businesses you need to be able to give a sense of ownership to the employees because each employee can make such a huge difference on the entire company when there are only a few of you.  Due to this he should let the employees work more indenpently and to make some decisions for the direction of the company (still this may need general budget approval though for some things)  but with this power it can motivate people greatly.  Another option that you can do to give your employees a sense of ownership is a profit sharing type payment structure.  With this the harder everyone works to make more money for the company, the more they make as well.

Of course money is a motivating factor, I will not argue that.  A really big motivator for me though is appreciation.  It doesn't have to be anything big.  It's just nice when people recognize the amount of time and effort you put into a project.  It's no fun when you put in long hours or accomplish things quickly and no one comments on your job well done.  Many times all it requires is a simple "thank you".